Detailed Explanation:

Liquidity refers to the ease and speed of converting an asset into cash without loss of value.

Currency is the most liquid asset as it is already in cash form.

Demand deposits can be withdrawn on demand anytime without notice or penalty, making them highly liquid.

Savings deposits can be withdrawn but may require prior notice or have withdrawal limits, making them moderately liquid.

Time deposits (Fixed Deposits) have a fixed maturity period and early withdrawal attracts penalty, making them the least liquid.

Decreasing order of liquidity: Currency (4) > Demand deposits (1) > Savings deposits (3) > Time deposits (2) = 4-1-3-2